It's no coincidence that "of the people, by the people, for the people" was a statement by the Union President, and that South Carolinians are the ones objecting. South Carolina was the spark plug for what James McPherson has accurately called The War of Southern Aggression. South Carolinians were most aggressive because they had the most to lose: SC had a black slave majority. Both democracy and the Golden Rule would have been deeply threatening to white South Carolinians.

July 25, 2011

As of close of business today we are, as a nation, what, seven days away from default? And no deal. No significant movement toward a deal. Nada. I'd say the odds are something like even that we'll get to August 2 either with no deal at all, or with some half-baked, contrived, obviously bogus fiscal contraption that will make the financial markets more, rather than less, apprehensive.

Will the world come to an end? Will we see the four horsemen riding down Main St? No.

What we will see is that credit markets will price in the risk of default, money will cost more, and more people will lose money, jobs, and homes.

FUBAR.

Here's the problem: the country owes a lot of money. We owe a lot of money because we spent a lot of money we didn't have. We spent it on Medicare Part D, we spent it on tax breaks that were going to spur dramatic growth but didn't really do that, we spent it on one war that arguably made sense at the time, but which was FUBAR'd, apparently irredemiably, by that other war that made no sense, then or now.

And yeah, because we bailed out the suits, because they had a f***ing gun to our head.

When you borrow a lot of money, you have to pay it back. If you don't have enough to pay it back, you have to make more. That, or you go bankrupt.

We're not going to cut our way to black ink. Not without totally screwing the place up. We need to raise more money.

So I would like the Congress of the United States of America to raise my taxes.

Not by some absurd margin. Not even by a great big margin. By, like, some single digit number of percentile points. Two points. Five points. Seven, if that's what it takes. I'd definitely feel seven points, but I'll definitely feel a couple of points on every other loan I take out for the next ten or twenty years, too.

We spent the money, now we have to pay the bill.

Raise my damn taxes. Please. Do it for a year, do it for five years, do it for ten years. Whatever it takes. Just knock this horsesh*t off and get it done.

It might be better to have put this as a comment, especially since this is a growing theme in the comments, but I think this is sufficiently different from what Dr Science has posted to call for a separate post and I've put it below the fold

July 22, 2011

When I saw the pictures of today's Oslo bombing, I was immediately reminded of an American terrorist attack -- not 9/11, but Oklahoma City. The first reports were that the bombing -- and the related massacre at a Youth Labor Camp -- were due to Al-Qaeda or other "jihadi" organizations.

But just as in OKC, this was homegrown terrorism -- and by as Aryan a specimen as you could hope to see:

Not just Aryan in appearance, either -- Breivik was arrested 10 years ago -- with explosives, police uniforms and guns.(my info is from a Norwegian e-friend's translation; GoogleTranslate is hilarious yet cryptic.) And his Facebook page says he's Christian.

Thinking about this, I'm prepared to make a sweeping generalization. If a government building is attacked, it's not truly foreign terrorists: it's either an individual or small group with a grievance that is way out of the mainstream, or it's an organized rebel or separatist group. Basically, to foreign terrorists the point is to target civilians, as many as possible; only domestic terrorists (or rebels) are opposed to the *government*, specifically.

All my sympathies go out to the victims and the rest of the people of Norway. It's a small, tight-knit country, and I imagine almost everyone will find they're only one, two, or three links away from one of the victims. The shock will reverberate for years or decades.

In the post on Michael Irvin and bravery, Slart let slip that he studied a little Mandarin and several other folks popped up. Chinese is a wall I have taken a run at three times and am starting on a 4th and I am starting to feel like Pvt. Pyle, Vincent D'Onofrio character in Full Metal Jacket. This is your open thread for how you study Chinese or any other language or any other thing that takes your fancy.

July 20, 2011

This floated across the twitter feed of the Guardian reporters and I thought it might be of interest. If there are any ObWi faithfull hailing from the land of the long white cloud, feel free to chime in.

July 17, 2011

Paul Krugman often wonders why the public and policymakers seem so deathly afraid of inflation. I don't know about policymakers, but I know why at least one member of the Regular Public (me) is afraid of it: because I don't *believe* in wages going up, but I sure believe in prices going up. This is possibly another post in which I will demonstrate that I don't understand economics.

In a multi-blog discussion about whether the Fed should open the inflation spigot a trifle, Mike Konczal at Rortybomb talked about

a wide refocusing of the mechanisms of our society towards the crucial obsession of oligarchs: wealth and income defense.

That has to be right. It doesn't necessarily take the form of pure cynicism; it's more a matter of the wealthy gravitating toward views of economic policy that make immediate sense in terms of their own interests, and politicians believing that only these views count as Serious because they're the views of wealthy people.

The context is a discussion about inflation -- Krugman describes the current situation as

So, terrible growth prospects; low inflation; oh, and low interest rates, with no sign of the bond vigilantes. Ordinary macroeconomic analysis tells you very clearly what we should be doing: fiscal expansion and monetary expansion by any means we can manage; in fact, the case for a higher inflation target pops right out of just about any model capable of producing the kind of mess we're in.

Konczal and Krugman agree that the Fed should be aiming toward a slight increase in inflation, largely because it means that the wealthy people and corporations who are currently sitting on cash reserves would have an incentive to move them into the economy.

I commented:

I'm sure you're correct in a macroeconomic sense that Inflation transfers real resources away from those whose income is money and towards other agents in the economy, and that it thus can be a way of getting wealth out of the hands of wealthy hoarders and into productive circulation.

But I think you are *radically* underestimating how much this prospect frightens regular (non-wealthy, non-economist) people, whose income comes in the form of money (wages) or money (SS and other retirement funds). We're *petrified* of inflation, and we're more petrified when, as now, our incomes have gone down (because so many of us are un- and under-employed).

Any talk of inflation, for us regular people, translates to making the little we've managed to hold on to worth even less. For us to be sanguine about even 3% inflation would require us to be sanguine about the prospect of wages and employment going up.

From your POV as an economically secure economist, this may translate to our fear of the lag time between when inflation starts to press on the wealthy and when they free up their resources. From my POV as a regular person, this fear is perfectly justified -- I assume the wealthy will resist, with all their great economic and political power, doing anything that reduces that power.